Algae Is the New Corn

Biofuels like ethanol are the green-seeming answer to energy independence and climate change that environmentalists love to hate, with good reason. Growing corn for ethanol instead of food drives up the price of food around the world, eating up petroleum-based fertilizers in the process.

The good news is that more efficient biofuels that don't compete with agricultural land are comingof age. One that seems particularly promising is skimmed from fish tanks every day—algae. When deprived of sunlight or nutrients, algae produces an oil that's chemically similar to petroleum. It's one of the fastest-growing species of plants in the world—some algal strains can double in volume overnight—so there's a potential for a tremendous amount of oil: 15,000 gallons per acre per year (compared to 50 gallons per acre per year from soy). Other advantages of algae include its ability to grow in dirty or brackish water or in artificial pools on otherwise unproductive land.

Analysts estimate that algae won't be commercially viable for five to 10 years—right now, it's too expensive to produce. The Department of Energy estimates its cost at $8 to $25 per gallon due to the work involved in growing, harvesting and draining the algae and extracting and refining the oil. That means ethanol is still king, but Congress seems to be wising up to the potential of the slimy stuff. This summer, the Senate voted to eliminate $6 billion worth of ethanol subsidies. Casting his vote, Senator Tom Udall of New Mexico said, "I hope today’s vote will put the [...] focus on developing advanced biofuels, such as algae and cellulosic ethanol, in 2012 and beyond.”